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By André Venturini 

Brazil experienced on April 21 the peak of its COVID crisis. Hit by a second stronger wave of infections, the country was responsible for nearly 25% of the worldwide deaths during that period. The consequences are not only limited to economy and public health. Intellectual property – patents, in particular – is now on the spotlight.

The first, and perhaps most profound decision in years, came from Brazil’s Supreme Court. The Attorney General for the Federal Government filed in 2016 Direct Unconstitutionality Action #5529 questioning the constitutionality of the sole paragraph of Art. 40 of our Industrial Property Law (IPL). Like in all other countries, the expiry date of a patent in Brazil is of 20 years from filing of the patent application. The sole paragraph of Art. 40 determines, however, that this term could not be less than 10 years counted from the patent grant. If a patent application took, for example, 12 years to be granted, its term of protection would be of 22 years.

This mechanism was introduced back in 1996 to compensate for the Brazilian PTO’s delays in examining patent applications for, what was thought at that time, exceptional situations. History proved, however, that exception would become rule. Nearly 100% of the patents granted in Brazil had the term adjusted according to the sole paragraph of Art. 40 in the recent past.

On May 06, 2021, the majority of the Supreme Court’s Justices ruled in favor of the unconstitutionality plea. According to them, the automatic term extension provided by Art. 40 would violate several constitutional principles (free competition, equal treatment, legal certainty and the required temporary nature of patents).

It is true that this decision affects patents in all technical fields. But the fact that this trial happened now, after pending for 5 years, evidences the influence COVID had on the decision. Access to health and the Brazilian universal health system were constantly mentioned in the Justices’ votes.

The Brazilian Government itself is not supporting any position against intellectual property rights. Brazil has, for example, opposed India and South Africa’s proposal to temporarily waive patent rights on COVID vaccines at WTO’s TRIPS Council. That created a diplomatic uneasiness between Brazil and India. It is worth remembering that Brazil is heavily reliant on raw material manufactured and exported by India for the production of the Oxford-AstraZeneca vaccine.

However, on April 29, 2021, Brazil’s Senate approved bill 12/2021 that increases the Executive powers to issue compulsory licenses. According to the proposed new rules, it is possible for the country to issue compulsory licenses without first negotiating with the rights holder. Further, patentees are obliged to hand over related know-how and regulatory data. This one seems to be particularly target to COVID vaccines. If a patentee subjected to a compulsory license fails to provide the required information, the related patents will be declared null.

The bill will now move to the Lower House of the Congress where it must also be voted. The Federal Government has a larger support base at the Lower House and it is of the President’s of the Lower House entire discretion of when proposed bills are voted. He has already mentioned that bill 12/2021 is not in his priority list. Even if voted and approved in the Lower House, the bill must still be endorsed by President Jair Bolsonaro, a well-known critic of this type of measures. Predictions are, of course, hard to make, but likelihood is that bill 12/2021 will never see the light of day.

One thing that definitely comes into play here is the recent statement of Biden’s administration in favor of India and South Africa’s COVID proposal. Brazil is still against the waiver, but has informed that, since the United States changed its initial position, would be willing to discuss this issue further.

After strongly hitting Brazil’s economy and public health, COVID is now spreading to intellectual property.

Originally published on Mondaq, 17 May 2021